Gold Prices Flatline as Gold Miners Surge on Dow Record (Update 1)

NEW YORK ( TheStreet) -- Gold prices finished unchanged on Wednesday as the Dow Jones Industrial Average again rallied to record highs. Mining stocks surged on the upbeat day for equities.

Gold for April delivery settled flat at $1,574.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,584.30 and as low as $1,566.40 an ounce, while the spot price was adding $7.90, according to Kitco's gold index.

"The thing to look at today with gold is that you have a pretty big reversal in the miners," said Jared Dillian, editor of The Daily Dirtnap and a former Lehman Brothers trader. "The big story in gold hasn't been so much the physical over the last couple of weeks, it's actually been the miners -- Market Vectors Gold Miners ETF ( GDX), the miner ETF, has been in a death spiral."

The miner ETF surged 4.2% on Wednesday, but has sold off heavily during the past six months. Market Vectors Junior Gold Miners ETF ( GDXJ) popped during the trading session by 4.8%.

Kinross Gold ( KGC) was the highest volume gainer as shares of the company added 4.2%.

Silver prices for May delivery rose 20 cents to close at $28.80 an ounce, while the U.S. dollar index was surging 0.51% to $82.50.

Gold prices ticked down to session lows Wednesday after the ADP jobs report revealed a decline in private payrolls to 198,000 in February from January's upwardly revised 215,000. Consensus among economists had been looking for a steeper fall to 170,000 new jobs.

Gold prices often have tracked the government's monthly employment situation and the ADP jobs report, because the Federal Reserve has tied its policy of low interest rates to the unemployment rate. The Fed has signaled that it may discontinue its low rates if unemployment dropped to 6.5% or inflation rose to 2.5%. Analysts have speculated this would also mean an end to the quantitative easing programs.

Factory orders came in a bit better than expected, but the Census Bureau said they still fell 2% in January. Economists had been looking for a 2.2% decline. Gold prices popped back above the session's flat-line on Wednesday as the decline in the factory orders report led investors to believe the manufacturing sector faces more economic headwinds.

"This down means there's going to be less production," said Miguel Perez-Santalla, vice president of business development for Bullion Vault.

Looking ahead, gold traders may be keeping a close eye on Friday's non-farm payrolls report for February.

The recent gloom for gold may have hidden shine.

Doubleline CapitalCEO Jeff Gundlach said Wednesday in a presentation that the Fed would not slow down its quantitative easing programs any time soon and said now would be a "reasonably good entry point for gold."

Platinum for April delivery dipped $5.90 to $1,579.80 an ounce, and palladium for June delivery added $5.45 to $740.05 an ounce, a day after the precious metals popped on positive news for auto sales outlook.

"We had some better news coming out of China, and the auto market more generally, stronger car sales and, of course, platinum and palladium are key ingredients in the catalytic converters which clean the emissions on cars," Will Rhind, managing director of ETF Securities U.S., said in an interview. "The auto industry was one of the worst affected industries by the financial crisis in 2008, and slowly but surely we've picked ourselves up from that position."

Rhind said that as the global economy continues to recover, so will car sales. This could be positive for platinum and palladium prices.